How D2C companies can reduce the fulfilment cost

Posted on April 12th, 2021
Share this post:

How D2C companies can reduce the fulfilment cost

What is D2C fulfilment?

The part of your D2C Company that includes activities after getting an order is referred to as D2C fulfilment. Once your customer has placed an order on your website, multiple steps are taken to process it for distribution including storage, inventory processing, order management, packaging, delivery, returns, and post-order monitoring.

It is said to be among the most crucial components of D2C Company because its effectiveness determines the final outcome of the customer experience. If orders are properly met while keeping policies and specifications in mind, customers will be overjoyed when they receive their orders.

5 Challenges in D2C fulfilment

Fulfilling orders for online stores is a difficult process. It necessitates seamless communication between various entities to ensure that the entire process runs smoothly. Here are some of the obstacles that D2C fulfilment faces.

  1. Costs of fulfilment

In D2C fulfilment, the cost of fulfilment is very critical. If not addressed from the start, this may add up to a significant sum and result in unforeseen losses. As a result, in addition to optimising your D2C fulfilment activities, it's difficult to keep your fulfilment costs from continually decreasing your profit margins.

  1. Disparities in weight

Weight conflicts with delivery firms are serious obstacles to D2C fulfilment. If the items are not properly packaged or weighted, there could be a discrepancy in measurements, resulting in weight disputes.

  1. Less space for storage

A common fulfilment issue is a lack of storage space. A D2C company is complex, and it grows at different times of the year. Since you can't process several orders at once, a lack of storage space can be a limiting factor for growth during these periods.

  1. Smooth integration

The incorporation of processes and technology is yet another challenging aspect of D2C fulfilment. With automation overrunning every aspect of the supply chain, integrating inventory control, order processing, and order management can be difficult.

  1. Shipping Delays

Shipping is one of the most difficult aspects of D2C fulfilment. As a result of different constraints, such as dependency or a courier partner, shipping may be delayed. As a result, ensuring a reliable shipping experience can be difficult.

How do you lower the fulfilment costs?

D2C fulfilment costs are potentially the most difficult of the 5 fulfilment challenges. Here are a few pointers to help you save money on fulfilment while improving your D2C fulfilment.

  • Outsource to a third-party logistics provider

It's a good idea to outsource your fulfilment operations to 3PL providers once your D2C business starts to expand steadily. There are several benefits of doing so.

  1. You are entrusting these activities to an established firm that specialises in them.

  2. Since the expenses cover all operations, you don't have to pay for each and every part of fulfilment.

  3. 3PL distribution hub employees are well-trained in the operations they oversee. As a result, there are fewer errors and a more pleasant customer experience.

  • Smarter Packing and Shipping

Packaging and delivery are the next two areas where you can save money on fulfilment. It's a good idea to buy packaging in bulk and keep it on hand for incoming orders. Following that, you can reduce any weight differences by mapping the inventory of unique packaging materials and using the best-sized packaging for each item. This will assist you in reducing your dimensional weight so that you don't have to pay any additional fees to courier companies.

If you don't use the right solution, shipping can be a headache. Often choose providers that provide you with a variety of shipping options. This will assist you in selecting the most appropriate courier for each shipment, as well as lowering shipping costs.

  • Slotting should be optimised

If you're still undecided about outsourcing your fulfilment activities, consider improving your warehouse slotting method. Coordinate inventory in a more inclusive manner so that picking time is minimised and workers can select and pack orders more quickly. Slotting allows you to increase the average speed of processing and dispatch while also optimising fulfilment activities.

  • Similar batch orders

When you batch similar orders, you could save time choosing orders and reduce transit time by a significant amount. For instance, you have a hundred orders for goggles, it’s pointless to go out and buy sunglasses a hundred times. Instead, it's smarter to group orders that are identical and choose them all at the same time. Small strategies, such as batch processing and slotting, can help you maximise your output without an enormous amount of automation.

  • Inventory and order management can be automated

Purchasing inventory and order management software is a one-time investment that pays off handsomely. Sellers don't limit themselves to selling on a single site. They receive orders from a variety of sources, including websites, retail outlets, physical stores, online stores, and so on. In these situations, using a centralised inventory and order management solution will save you a lot of time. The software will also aid you with smart inventory prediction, so that you never run out of stock.

  • Your Staff Should Be Trained

Lastly, you must have monthly training sessions with your employees in order to keep them up to date on any new additions to your operation. The more you educate your employees on new technologies, the more they can perform and remain involved in the whole supply chain.

Final thoughts

As the popularity and value of eCommerce grow, many order fulfilment processes and companies are finding it increasingly difficult to keep their fulfilment costs under control. The intrinsic value and contribution to profit of each package declines as the cost to choose, prepare, pack, and deliver each order rises. Therefore, D2C companies must find ways to reduce these fulfilment costs if they are to stay competitive in today's market environment.

If fulfilment costs are not managed on a regular basis, it can be a challenging job. Conducting daily warehouse checks is another strategy to follow. The more audits you conduct, the better prepared you'll be to deal with any issues that arise and to come up with new ways to strengthen your fulfilment supply chain.


Posted on:
April 12th, 2021